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COMMENTARY: Competiton does wonders

By   /   November 27, 2012  /   Comments Off

By Kevin Binversie
 
It is amazing what a marketing campaign can tell you about some things — not just the new package or latest spinoff, but the way the brand managers want us to see it.  
 
Consider WEA Trust’s recent radio ad campaign during University of Wisconsin-Madison Badgers and Green Bay Packers football games. WEA Trust is a nonprofit insurance company with ties to the Wisconsin Educational Association Council, or WEAC, the state’s largest teacher’s union.
 
In the ads, the insurer portrays itself as the trusted choice of countless public employers looking for strong, reliable health, dental and comprehensive care for their employees. That is fine and all, but the fact the advertisement even exists in the first place is telling alone.
 
It very well may be the first advertising from a company that has been around since 1970.
 
In the Wisconsin before Gov. Scott Walker’s collective-bargaining reforms, Act 10, it was often the practice of local teachers’ unions to negotiate WEA Trust as their preferred provider. At its height, the insurance company covered over 70 percent of the state’s school districts.
 
Since the passage of Act 10, with school boards free of collective bargaining agreements to shop for savings, WEA Trust took a hit of $70 million. For many districts, it may have been the first time in decades they were able to change health insurance providers.
 
Earlier this year, a Wisconsin Taxpayers’ Alliance study found that in its first year of enactment Act 10 has saved Wisconsin taxpayers $90 million was from lower health insurance costs — and another $240 million in pension costs.
 
 
But there’s nothing as compelling as a comeback story. Despite the setbacks, the new competition has actually made WEA Trust better. The company has diversified its products, offering cheaper alternative plans and expanding into new markets.
 
“After all the dust settled, and I have had a chance to talk to policymakers, Republicans, Democrats, and other decision makers, I have told them all the same thing,” Steve Lyons, public relations director of WEA Trust, said. “If we are allowed to stand on our products and services, we can live and die on that mountain.”
 
The company’s expanded sales force has begun selling health insurance plans directly to the municipalities market serving cities, towns, villages, and even the county level. It has also allowed them to re-sign customers with added net savings to the taxpayer.
 
“At the end of the day, it is about who has the best products and services at the right price,” said
Lyons.
 
Lost in all the politics of the past two years of Wisconsin post-Act 10 has been what the law was initially intended to do. While unions and their backers say the law was meant strictly as a way to neuter them politically, the overall fiscal benefit of the law has been hard to argue. 
 
At the end of the day, the story of “the new” WEA Trust is one of the market succeeding, not a forced monopoly due to backroom deals. That, and the taxpayer savings alone, ought to be applauded no matter what one’s political persuasion.
 
Veteran political blogger Kevin Binversie is a Wisconsin native. He served in the George W. Bush administration from 2007-2009, worked at the Heritage Foundation and has worked on numerous state Republican campaigns, most recently as research director for Ron Johnson for Senate. Contact him at kevin.binversie@franklincenterhq.org

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